NOT FOR PUBLICATION UNTIL RELEASED BY

THE HOUSE ARMED SERVICES COMMITTEE

SUBCOMMITTEE ON TACTICAL AIR AND LAND FORCES

STATEMENT OF

LT GENERAL CHRISTOPHER C. BOGDAN

PROGRAM EXECUTIVE OFFICER, F-35

BEFORE THE

TACTICAL AIR AND LAND FORCES SUBCOMMITTEE

OF THE

HOUSE ARMED SERVICES COMMITTEE

ON

F-35 PROGRAM REVIEW

FEBRUARY 16, 2017

NOT FOR PUBLICATION UNTIL RELEASED BY

THE HOUSE ARMED SERVICES COMMITTEE
SUBCOMMITTEE ON TACTICAL AIR AND LAND FORCES
I Introduction

Chairman Turner, Ranking Member Tsongas and distinguished Members of the

Subcommittee, thank you for the opportunity to appear before you to discuss the F-35 Lightning II.

The F-35 Program is a much different and improved program than it was 5 years ago.

The F-35 weapon system is now operational and forward deployed. The size of the fleet

continues to grow and we are rapidly expanding its capability. The F-35 will form the backbone

of United States (U.S.) air combat superiority for decades to come, replacing or complementing

the legacy tactical fighter fleets of the Air Force, Navy, and Marine Corps with a dominant,

multirole, fifth-generation aircraft, capable of projecting U.S. power and deterring potential

adversaries. For our International Partners and Foreign Military Sales (FMS) customers who are

participating in the program, the F-35 will become a linchpin for future coalition operations and

will help to close a crucial capability gap that will enhance the strength of our security alliances.

The Programs costs are well understood, stable and with respect to production and

operating costs, they are decreasing making the F-35 more affordable each and every day. The

costs to complete the Development program still remain well within the budget established in

2011 after the Nunn-McCurdy Breach.

Our overall assessment is that the program is making solid progress, as it grows and

accelerates; and shows improvement each day as we continue to manage emerging issues and

mitigate program risks.

II Accomplishments

The F-35 fleet now exceeds 210 aircraft and it has surpassed 73,000 flight hours. The

program continues to execute well across the entire spectrum of acquisition, to include

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development and design, flight test, production, fielding and base stand-up, sustainment of

fielded aircraft, and building a global sustainment enterprise. We are again pleased to report

many accomplishments by the F-35 team during the past year but none are more satisfying than

the declaration of Initial Operating Capability (IOC) for the F-35A by the U.S. Air Force

(USAF) last summer and seeing the U.S. Marine Corps (USMC) forward deploy its F-35Bs.

The F-35 program had two overseas deployments and two additional sea trials this past

year. The first deployment took two Dutch F-35A aircraft from the U.S. to the Netherlands for

three weeks. The Dutch conducted a noise survey and introduced their people to the F-35s by

flying it all around the Netherlands and flying it and displaying it at their annual airshow.

In June of last year, the USAF, USMC and the United Kingdom deployed 2 F-35As and 3

F-35Bs to England where the F-35 Lightning II made its debut at the Farnborough International

Airshow and Royal International Air Tattoo in the United Kingdom allowing our European

partners and allies a chance to see the F-35s and learn more about its capabilities. Additionally,

the program completed its final round of sea trials with the USMCs F-35Bs aboard the USS

AMERICA and with the U.S. Navys (USN) F-35Cs aboard the USS GEORGE

WASHINGTON. During these sea trials, the F-35Bs completed 60 sorties in 21 days and the

F-35Cs completed 41 sorties in 19 days.

The F-35 Development Test (DT) team also completed all F-35A envelope testing and all

F-35C aerial refueling testing in 2016. In addition, this year marked the successful in-flight

firing of the F-35A internally-mounted GAU-22 25-millimeter cannon and the ground testing of

the F-35B and F-35C centerline cannon pod. Air-to-Air accuracy testing of the GAU-22 is

expected to complete spring 2017. Furthermore, there were several milestones with the United

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Kingdom, including successfully testing its aerial refueling tankers compatibility with the F-35

and first flight release of its unique weapons.

The program also successfully upgraded all Block 2A aircraft to the newer more capable

Block 2B configuration. Today all F-35s in the field are either Block 2B aircraft or Block 3i

aircraft, with both Block 2B and 3i having the same limited warfighting capability. The Block 3i

software stability issues we reported on last year were corrected and the final iteration of

software, Block 3F, is now in flight test and continues to mature.

The DT program achieved some significant milestones in 2016, flying 1,447 DT flights,

performing 63 weapon separations and executing 16 Weapon Delivery Accuracy (WDAs)

missions, all of which were the highest annual totals in the F-35 programs history. The program

also executed a highly concentrated WDA test phase where 12 WDA tests and 13 weapon

separations were accomplished in a 1 month span across multiple test ranges, outpacing a

historical execution rate of roughly 1 WDA every 5 weeks.

The Autonomic Logistics Information System (ALIS) successfully supported

Development and Operation test events demonstrating the deployability of the ALIS system

ashore and afloat. Lessons learned were collected and incorporated into the ALIS Deployment

Guide which was delivered to the users to help them more quickly and easily breakdown, move

and set up the deployable ALIS. Further, the ALIS Operational Representative Environment

(ORE) at Edwards Air Force Base in California is now testing the latest versions of ALIS before

fielding to the operational fleet. This was an important improvement in delivering a better ALIS

system to the warfighter. This testing has been highly successful in identifying software

deficiencies that have proven difficult to identify in industry laboratories during earlier phases of

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testing. The results of these findings from the ORE will result in fielding a more stable, better

ALIS system with fewer discrepancies than in the past.

Understanding that the F-35 could be subject to hostile cyber environment, the program

undertook more comprehensive cyber penetration testing for the ALIS and the F-35 air vehicle as

a whole. This testing has facilitated improvements to ALIS cyber protection capabilities and

procedures. In addition to this vulnerability, the F-35 Joint Program Office (JPO) with the Joint

Operational Test Team (JOTT) has planned additional assessments in early to mid-2017 for the

newer ALIS 2.0.2 release. We continue to work closely with the JOTT on planning and

executing future ALIS and air vehicle cyber security testing throughout the life of the Program.

III System Design and Development

System Design and Development (SDD) Schedule: Steady progress is being made

toward the completion of the SDD program. There are two important milestones associated with

the closeout of this phase of the program: completion of SDD flight test and the delivery of the

full Block 3F capability. It is important for the committee to understand that the end of SDD

will be event driven. The JPO/Industry team will continue SDD until the full Block 3F

capability is delivered to warfighter. There is no intention of truncating the program on any

specific calendar date or at some predetermined budget-level. With respect to completion of

F-35 flight test, the original 2011 re-baseline Program of Record showed flight testing to end on

31 October 2017. The JPO has always believed there is 3 to 4 months of risk to this completion

date, putting the end of SDD flight test in February 2018. This risk adjusted date is the result of

a number of flight test delays experienced in the past 2 years including the F-35 engine fire

which stopped flight testing for 2 months and software stability issues and fusion issues with the

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Block 3i software which have delayed Block 3F flight testing.

The Department of Defense (DoD) has directed the JPO to maintain the resources

necessary to continue flight testing to May 2018, if necessary, to ensure we will deliver the full

Block 3F capability. The biggest risks to the timely completion of SDD flight testing include

software stability, the discovery of new software deficiencies, the time it takes to correct

deficiencies, and the health of our DT test fleet.

The second important milestone leading to the completion of SDD is the delivery and

fielding of the full Block 3F capability including the full aircraft and weapons envelope. The

following table shows the programs estimates of when these full capabilities will be delivered.

Full Block 3F Capability Delivery

2011 Post Nunn-McCurdy APB Dates
Objective: August 2017
Threshold: February 2018
Current Estimate
F-35A: October 2017 (w/o AIM-9X)
November 2017 (w/ AIM-9X)
F-35B: November 2017 (1.3 Mach)
May 2018 (1.6 Mach)
F-35C: January 2018 (1.3 Mach)
February 2018 (1.6 Mach)

As you can see from the table, the delivery of the full capability for all 3 variants falls

within the original 2011 Acquisition Program Baseline dates with the exception of the B-model

envelope between 1.3 and 1.6 Mach which is slightly delayed, due to having only one B-model

test aircraft (BF-3) properly instrumented for the testing needed to get to 1.6 Mach.

SDD Cost to Complete: The remaining SDD work is estimated to cost $2.3 billion which

includes an additional $532 million above the current funded program. The additional funding is

needed due to several factors. First, there were additional requirements added to the program

during SDD (e.g., deployable ALIS, mandated program security changes, mandated aircraft

cyber security changes) which were never paid for at the time they were executed. These new
6
requirements totaled $165 million. Secondly, DoD removed $100 million from SDD funding in

prior years to pay other higher priority bills and this money was never restored to the Programs

baseline SDD budget. Finally, a shortfall of approximately $267 million was caused by

unforeseen events, such as the 2014 engine fire and the delay to Block 3F testing while the

Program improved Block 3i software stability and fusion issues, both of these issues resulted in

added schedule and cost to the competition of SDD. The $265 million of payback along with

the $267 million due to unforeseen events resulted in a need for an additional $532 million. This

money as mentioned above will be sourced from inside the F-35 Program using management

reserve, unearned fee and the savings resulting from negotiating lower costs on various contracts.

Use of this internal funding will result in no impact to any other DoD programs or the

Services/DoDs budget requirements. Additionally, as mentioned previously the Department has

directed the JPO to maintain the resources necessary to continue SDD flight testing to May 2018.

Should flight testing beyond February 2018 to May 2018 be necessary the JPO will hold $100

million of Follow-on-Modernization (FoM) funding in fiscal year (FY) 2018 to pay for this

added flight testing.

As a final note on the SDD budget, it is important to look back to the 2011 Rebaselined

Program and compare todays cost estimate to complete SDD with the cost controls put in place

after the Nunn-McCurdy Breach. The following table makes this comparison.

SDD Cost Baseline

2011 Post Nunn-McCurdy 2011 Current Estimate
Objective: $13.9 B (50 % probability) $13.9 B
Threshold: $15.1 B delta = $267 M (discoveries)
Total = $14.2 B

As the chart indicates, the Program has remained within $267 million (2.1%) of the 2011

7
Objective Budget Estimate and well below the Threshold Budget Estimate, indicating that the

fiscal discipline and cost control measures executed by the Department have been effective.

SDD Risks: At this time last year and in response to software stability problems, the

Program had launched an in-depth look at the architecture by a Software Stability Red Team.

After a wide-ranging technical analysis, the team confirmed that the F-35s basic software

architecture is sound and can support the full Block 3F warfighting capability. However, the

team also identified that the end-to-end testing of the software needs to be streamlined and

improved, and the metrics used to track software performance need to be updated to reflect

operational considerations.

One significant improvement that has been made over the past year, is the ability of the

JPO/Industry team to find, fix, code, lab test, and deliver to flight test a new increment of

mission systems software in 30 to 45 days. Previously during Block 2B and 3i software

development and testing this process took approximately 3 to 4 months. Now with better

software tools, faster feedback from the testers, and a streamlined airworthiness process we have

cut this timeline significantly. This has greatly improved our ability to fix emerging software

issues and field better software sooner. We intend on building on this success as we move to

FoM. Additionally, the JPO implemented a new method of tracking software stability that takes

into account at what point in a mission a stability event occurs and the operational impact of that

event. These changes will provide better insight as to the causes and circumstances of these

stability events and better position the program for more stable, effective software in the future.

Currently the stability of our Block 2B and 3i software is exceeding our initial estimates

in terms of stability. Today the Block 2B software experiences a software stability event once

8
every 29 flight hours and Block 3i experiences a software stability event once every 25 flight

hours. By way of comparison, our target for this stability was approximately one event every 10

flight hours. Although the Block 3F software is in its early stages of flight testing, we are seeing

stability data indicating it will exceed the 20 flight hour mark before experiencing an event.

Block 3F Software Risk: An additional risk to completing SDD on time with Full

capability within the JPOs budget is the level of complexity of the new capabilities in Block 3F

software. For example, Block 3F software must take information from other sources, such as

other non-F-35 aircraft, satellites, and ground stations and fuse this information with F-35

information, giving the pilot a complete and accurate picture of the battlespace. We are also

fielding the capability for more than 4 F-35s, in some instances up to 8 and 12 F-35s to be linked

together passing information to each other throughout the battlespace. This unprecedented

networking capability and this taking in off-board information make the Block 3F software

very capable but also very complex.

ALIS Risk: The next version of ALIS, version 2.0.2, also remains a technical and

schedule risk. This version of ALIS combines the management of F135 engine maintenance

within ALIS and tracks all the life-limited parts on each and every F-35 aircraft. The

development of these capabilities is proving to be more difficult to integrate than previously

estimated. To address these difficulties, industry has added additional software expertise to its

team, and we have set up and operate the ALIS ORE at Edwards Air Force Base in California to

test ALIS in a more operationally relevant environment. Despite these efforts, ALIS 2.0.2 is

approximately 4 months late to fielding, with the first fielding to occur in March 2017 at Nellis

Air Force Base in Nevada.

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 SDD Discoveries / Deficiencies: Although solid progress is being made -- we are now

past the 90 percent complete with all of SDD -- F-35 development is not without technical

discoveries and deficiencies, which are common for a system that is still in development.

Over the course of testing during SDD, we have discovered and reported deficiencies;

however, no development program can ever expect to correct every open deficiency. The F-35

program is committed to correcting all deficiencies that the Services and Partners deem

necessary to fix. The Program has a disciplined, long-successful process of using Services and

Partners inputs to rank and prioritize all deficiencies that alone or in combination need to be

corrected. The Program then fixes those high priority deficiencies. The Program has planned for

additional flight testing for any deficiencies that require further fix verification or for any new

deficiencies that may be discovered during continued development. We are committed to

providing a Block 3F capability that operationally is effective and suitable for the operational test

force and the warfighter.

Currently there are 100 Category 1 (Must Fix) deficiencies, and of those, 25 have already

been corrected and verified as fixed, 33 have been corrected but are awaiting a test to verify that

they are fixed, 39 are in the process of being fixed, and 3 are still being investigated. The Program

has a plan in place to fix, test and verify all Category 1 (Must Fix) and Category 2 (Significant

Impact) deficiencies with upgraded software releases and physical modifications to the aircraft.

During F-35C flight test in December 2015, it was discovered the outer, folding portion

of the wing has inadequate structural strength to support the loads induced by pylons with AIM-

9X missiles during maneuvers that cause buffet. The Program is currently flight testing re-

designed outer wings. Once the new design is verified to provide the require strength, the fix

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will be implemented in production and retrofitted to existing aircraft by swapping existing outer

wings with the re-designed ones. Overall 32 aircraft will require the modification and the effort

is scheduled to begin in summer 2017.

Another deficiency the Program is solving involves excessive F-35C vertical oscillations

during carrier launch. During a catapult launch the nose landing gear strut is compressed as the

catapult initial pre-tension load pulls on the nose landing gear, with the hold back bar restraining

the aircraft from further forward movement due to engine thrust. Upon release of the hold back

bar, the nose landing gear strut unloads and vertically oscillates as the aircraft accelerates

towards take-off. The oscillations are more severe during lighter aircraft weight launches. The

Program will test a reduced release load hold back bar in February/March 2017 with anticipated

evaluation by the Navy in spring 2017. Results of this testing and the Navys evaluation will

determine if further corrective action is required.

IV Initial Operational Test and Evaluation

Initial Operational Test and Evaluation (IOT&E) Entrance: There are a number of

criteria required by the DOT&E that must be met before IOT&E can begin. These include the

release of the final Block 3F aircraft capability, the release of ALIS 3.0, the release of a verified

and validated Mission Data File (MDF), the readiness of 23 instrumented aircraft in a Block 3F

production representative configuration (6 USAF A-models, 6 USMC B-models, 6 USN C-

models, 3 UK B-models, and 2 Netherlands A-models), and functioning Air-to-Air Range

Infrastructure 2 (AARI 2) capability on the test aircraft and ranges. Additionally, a verified,

validated, and accredited F-35 simulator must be delivered approximately 4 months prior to

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completion of the 13 month long IOT&E program. This simulator requirement will be met by

the Joint Simulation Environment located at Naval Air Station Patuxent River in Maryland.

It is likely that by February 2018, the release of ALIS 3.0, the release of a verified and

validated MDF, the modifications necessary to place all 23 aircraft into a production

representative configuration will not be completed. However, a large subset of those entrance

criteria to start IOT&E will be met by February 2018. It is possible, with DOT&E approval, to

incrementally start IOT&E by March 2018. Starting IOT&E incrementally, earlier than waiting

for all entrance criteria to be fully met is desirable for many reasons: First, obtaining earlier

feedback from the OT community will enable the JPO and Industry to make corrections and

fixes sooner, providing better capabilities to the warfighter. Second, delaying IOT&E will result

in higher costs because IOT&E support will have to continue longer than planned. The JPO

estimates that a 6 month delay in the start of IOT&E will cost an additional $30 million. Finally,

since F-35s will be produced at over 100+ airplanes per year during IOT&E, the sooner

deficiencies are discovered the quicker they can be cut into production, saving the time and

resources that would otherwise be needed to retrofit these jets if they were to be produced

without the corrections.

Annual Director of Operational Test and Evaluation (DOT&E) Evaluation: On 10

January, the Office of the Secretary of Defense (OSD) DOT&E released the 2016 DOT&E

report on the F-35 to Congress. The independent program review from the DOT&E is an annual

occurrence, and the process was executed with unfettered access to information and with the full

cooperation of the F-35 JPO. There were no surprises in the draft report reviewed by the JPO;

all of the issues mentioned are well-known to the JPO, the U.S. Services, International Partners

12
and our Industry team. While not highlighted by the DOT&E report, among the 17 issues cited
in the report, the F-35 Program fully concurs with 10 of them, partially concurs with 4, and
defers to the USN and USMC regarding the other 3. The F-35 Program has a dedicated effort
underway to resolve or otherwise mitigate them, as shown in the table below.
DOT&E Recommendation
1. The program should complete all necessary
Block 3F baseline test points. If the
program uses test data from previous
testing or added complex test points to sign
off some of these test points, the program
must ensure the data are applicable and
provide sufficient statistical confidence
prior to deleting any underlying build-up
test points.
2. In light of the fact that the program is
unable to correct all open deficiencies prior
to IOT&E, the program should assess and
mitigate the cumulative effects of the many
remaining SDD deficiencies on F-35
effectiveness and suitability, especially
those deficiencies that, in combination or
alone, may cause operational mission
failures during IOT&E or in combat, prior
to finalizing and fielding Block 3F. The
program will need to add test points to
troubleshoot and address deficiencies that
are currently not resolved.
3. The program should consider developing
another full version of Block 3F software to
deliver to flight test in order to address
more known deficiencies.
F-35 JPO Corrective Action
Concur: The program should complete all necessary
test points. The F-35 program will continue to
exercise the disciplined process of determining if
test points are no longer required based on previous
results. This process includes the OT, DT and
operational user community. Any test point
considered no longer required will documented
through the process.
Partially Concur: No acquisition program can ever
expect to correct every open deficiency. The F-35
program is committed to correcting all deficiencies
that the Services and Partners deem necessary to fix.
The Program has a disciplined, long-successful
process of using Services and Partners inputs to
rank and prioritize all deficiencies that alone or in
combination need to be corrected. The Program
then fixes those high priority deficiencies. The
Program has planned for additional flight testing for
any deficiencies that require further fix verification
or for any new deficiencies that may be discovered
during continued development.
Partially Concur: The JPO partially concurs with
the recommendation consistent with last years
response. The JPO software development strategy
continuously evaluates known deficiencies for
inclusion in future software releases. Whether
additional software releases are necessary before the
start of IOT&E will depend on the severity of the
deficiencies, when they are discovered, and
warfighter inputs on when and if they require fixes.
Currently, the final version of software (3FR6) will
have at least two additional updates (increments) to
address deficiencies in the Feb to April 2017
timeframe.
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 DOT&E Recommendation
4. The program should ensure adequate
resources remain available (personnel, labs,
flight test aircraft) through the completion
of IOT&E to develop, test, and verify
corrections to deficiencies identified during
flight testing.
5. The program should address the deficiency
of excessive F-35C vertical oscillations
during catapult launches within SDD to
ensure catapult operations can be
conducted safely during IOT&E and during
operational carrier deployments.
6. The Program Office must immediately fund
and expedite the contracting actions for the
necessary hardware and software
modifications to provide the necessary and
adequate Block 3F mission data
development capabilities for the USRL,
including an adequate number of additional
radio frequency signal generator channels
and the other required hardware and
software tools.
7. The program should address the JOTT-
identified shortfalls in the USRL that
prevent the lab from reacting to new threats
and reprogramming mission data files
consistent with the standards routinely
achieved on legacy aircraft.
8. The program should correct deficiencies
that are preventing completion of all of the
TEMP-required Block 3F Weapons
Delivery Accuracy (WDA) events and
F-35 JPO Corrective Action
Partially Concur: The JPO software development
strategy continuously evaluates deficiencies for
inclusion in future software releases. As part of the
evaluation, the resources needed to support this
work are continuously evaluated to ensure adequate
resources are available as needed.
Concur: The JPO is already taking action, under
the advice a NAVAIR-led Red Team. The program
is planning field-based catapult testing of a SDD
aircraft in February 2016 to assess: (a) standardized
pilot guidance for use of cockpit restraints, (b) a
corrected helmet magnetic map file that should
reduce unintended movement of helmet display
symbology during launch and (c) a reduced release
load for the repeatable-release hold-back bar
(RRHB) that will reduce the stored energy in the
nose strut at the start of the launch. If successful,
VFA-101 would return to carrier qualification trials
in mid-2017 to assess these same changes. If further
improvement is still required after making these
changes, concepts have been developed for JPO to
pursue longer-term solutions.
Concur: The hardware and software necessary to
develop, test, and release Block 3F mission data files
will be in place at the USRL by February 2017.
Additionally, Industry has gone out on risk to begin
this effort prior to contract award. The additional
radio frequency signal generator channels are being
aligned with the Follow-on Modernization upgrade.
Concur: The mission data file generation tool being
delivered in February 2017 addresses many of the
shortfalls identified. The remaining shortfalls will
be addressed in subsequent USRL capability
upgrades to fully satisfy JOTT and DOT&E intent.
Concur: Work is on-going to address all deficiencies
that are preventing the completion of the final Block
3F WDA events. The current schedule has all WDA
events completed by March 2017.
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 DOT&E Recommendation F-35 JPO Corrective Action
ensure the events are completed prior to
finishing SDD.

9. The program should ensure Block 3F is Concur: JPO is working with the Service and
delivered with capability to engage moving Industry to integrate the GBU-49 on the F-35 by the
targets, such as that provided by the GBU- end of CY2017.
49, that do not require leadlaser guidance.

10. The program should complete additional Partially Concur: Off-nominal testing has been
testing and analysis needed to determine completed. The results were used to update the
the risk of pilots being harmed by the safety assessments which remained at a low risk and
Transparency Removal System (which this has been shared with the Services. Upgrades to
shatters the canopy first, allowing the seat the ejection seat, currently in-work, or helmet would
and pilot to leave the aircraft) during not impact performance of the Transparency
ejections in other than ideal, stable Removal System.
conditions (such as after battle damage or
during out-of-control situations). The
program should complete these tests as
soon as possible, with the new equipment,
including the Gen III Lite helmet in a
variety of off-nominal conditions, so that
the Services can better assess risk
associated with ejections under these off-
nominal conditions.

11. The program needs to conduct an
assessment to determine the extent to
which the results of further durability
testing with BH-1, the F-35B durability test
article, are representative of production
aircraft and, if necessary, procure another
test article for the third life testing.
Concur: JPO has conducted an engineering
assessment, resulting in a recommendation for an
additional article and test. The UK MOD has
provided a formal request for an additional test, and
a similar requirement is expected from NAVAIR in
the near future. Preliminary planning and budgeting
activities have been initiated.

12. The Navy and the Program Office should
investigate alternatives for determining the
operational impact of an engine removal
and install while conducting carrier air
wing operations at sea.
Concur: Engine R&R has already been
demonstrated for during sea trials for both the B and
C models. If the Services require further testing or
demonstrations, the JPO will support such events.

13. The Navy and Marine Corps should Defer: The JPO will defer to the U.S. Navy and
conduct an analysis, such as an operational USMC on this recommendation.
logistics footprint study, which simulates
flight deck and hangar bay spotting
(aircraft placement) with a full ACE
onboard, using data from the DT-III ship
trials to determine what the impact of an
15
 DOT&E Recommendation F-35 JPO Corrective Action
engine removal and installation would be
on integrated ship and ACE operations with
a full ACE onboard.

14. The program and the Navy should Concur: The power module container has been re-
investigate if the heavy power module designed for better usability at sea and will be
container should be redesigned for better available for future deployments.
usability at sea.

15. The program and the Navy should Defer: The JPO will defer to the U.S. Navy on this
investigate potential options to improve recommendation.
ship-based communications bandwidth
dedicated to ALIS connectivity off-ship,
such as increasing the priority of ALIS
transmissions, or reserving low-use times
of the day for handling large volumes of
ALIS message traffic.

16. The Navy should investigate any efficient,
multi-use opportunities for F-35 support
equipment (SE) such as using legacy SE on
the F-35 or F-35 SE on legacy aircraft.
Concur: The Program already has in place a
successful multi-use support equipment process
where opportunities have already been harvested
such as the use of a legacy lift for the engine power
module container.

17. The Navy should investigate options for Defer: The JPO will defer to the U.S. Navy on this
increasing the number of wall power recommendation.
outlets in CVN hangar bays to help
facilitate simultaneous maintenance on
multiple F-35Cs, or the ability to
interconnect multiple pieces of support
equipment from a single outlet to permit
simultaneous operations.

V Follow-on-Modernization

Looking beyond the SDD program, the follow-on effort, known as FoM, is moving

forward. The F-35 JPO will execute FoM as a continuation of the F-35 program with full

transparency and reporting on cost, schedule and performance as if it were a new program.

FY 2016 efforts included contracts for a Requirements Decomposition and System Functional

Review effort for early Block 4 requirements. Additionally the Technical Refresh 3 (TR-3)
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hardware strategy (new F-35 main computers and displays) has been identified, a suitable

specification was developed and the TR-3 system design phase will be awarded to Lockheed

Martin in the first half of 2017.

Efforts this year (2017) will include a Requirements Decomposition and Functional

Allocation of Block 4.1 and completion of the System Functional Review this summer. A

Planning and Systems Engineering Phase II contract award is planned for spring 2017, which

will support a Preliminary Design Review for Block 4.1 prior to the major Engineering,

Manufacturing and Development contract award in late 2018.

After a thorough analysis of the original F-22 and F/A-18 modernization strategies, the

F-35 program will continue to heed lessons learned and will be fully transparent to the Congress

by providing a separate modernization statement of work and contract, a separate modernization

budget to be reported to the Congress, a separate cost reporting and earned value performance

reporting system, an independent program cost estimate updated prior to contract award, and

finally, rigorous, formal requirements oversight.

F-35 Dual Capable Aircraft continues to be aligned with and included in the initial

increment of the Block 4 FoM effort. Detailed Risk Reduction activities have been completed to

ensure that the F-35A is fully compatible with the B61-12 weapon. The JPO has begun initial

planning for the Block 4 Nuclear Certification efforts in anticipation of beginning B61-12

integration on the Block 4.1 configured F-35A in 2018. The F-35 JPO is fully engaged with the

USAF, Department of Energy, and strategic partners and is confident that this capability will be

fielded and certified in time to meet specified need dates.

Block 4 planning for developmental and operational testing, to include the number of test

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assets required, is in the early stages and seeks to successfully transition from a large scale air

vehicle system testing to a more focused capability update(s) testing planned in modernization.

The current focus is on planning for a sufficient and efficient level of test assets and

infrastructure to fully support a planned 2 year update cycle. Further, the Program is identifying

the modifications required by the development test fleet to accomplish FoM Block 4 testing.

VI Production

Production Delivery Performance: In 2016, the program delivered 46 aircraft, 7 short of

the planned 53 aircraft. This includes 40 aircraft from the Fort Worth, Texas, Final Assembly

and Check Out (FACO) facility and 6 aircraft from the Italian FACO in Cameri, Italy. In August

of 2016, Lockheed Martin declared an issue with non-conforming insulation on the

polyalphaolefin (PAO) cooling tubes in some F-35A wing fuel tanks. The subsequent

investigation and repairs affected 42 production aircraft, and resulted in delays, limiting the

production delivery to 46 aircraft from the planned 53 aircraft in 2016.

In 2017, the goal is to deliver a total of 66 aircraft, which includes carryover of the seven

aircraft originally planned for delivery in 2016. Of those 66 aircraft, 61 aircraft will be delivered

from the Fort Worth FACO, 3 aircraft from the Italian FACO, which includes their first B model

produced, and the first 2 aircraft deliveries from the Japanese FACO in Nagoya, Japan.

F-35 LRIP Pricing: The price of F-35s continues to decline steadily Lot after Lot. For

example, the price (including airframe, engine, and contractor fee) of a LRIP 9 F-35A aircraft is

approximately 5.5 percent less than an LRIP 8 aircraft, a LRIP 9 F-35B aircraft is approximately

2.0 percent less than an LRIP 8 aircraft, and a LRIP 9 F-35C aircraft is approximately 2.6

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percent more than an LRIP 8 aircraft. The F-35C increase is driven by the quantity negotiated

dropping from four in LRIP 8 to two in LRIP 9.

We recently reached an agreement with the F-35 prime contractor for LRIP 10 marking

the first time the price for an F-35A will be below $100 million. The price for a LRIP 10 F-35A

will be $94.6 million, a 7.3 percent reduction from LRIP 9. The LRIP 10 prices for an F-35B

($122.8 million) and F-35C ($121.8 million) will also be lower than LRIP 9 prices by 6.7 percent

and 7.9 percent, respectively.

Over the course of the LRIP contracts we have had a challenge on the timeliness of

aircraft deliveries. However, over the past few years, even though production quantities have

increased, we are seeing a dramatic reduction in the number of average days aircraft are being

delivered late as shown in the table below.

Average Days Late to

LRIP
Contract Deliveries
1 23
2 96
3 131
4 139
5 87
6 68
7 20
8 30

Late deliveries have jumped from an average of 20 to 30 days for the 34 aircraft in LRIP

8, mainly due to the PAO tube issue referenced earlier. The trend of fewer and fewer late

deliveries is a positive development that the JPO and Industry will continue to improve upon in

the coming years.

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 Production Block Buy / EOQ Contracting: The program has initiated a Block

Buy/Economic Order Quantity (EOQ) contracting strategy for LRIPs 12, 13 and 14. This

strategy gives the F-35 Partners and FMS customers the flexibility to procure all aircraft in a

single procurement for LRIP 12 (FY 2018) or to procure aircraft and engines in a multiple lot

format for LRIP 12 (FY 2018), LRIP 13 (FY 2019), and LRIP 14 (FY 2020). The U.S. Services

will procure LRIP 12, 13 and 14 as single year procurements and will only request Congressional

approval to award a single contract to procure material and equipment in EOQ for FY 2019 and

FY 2020. There is no multi-year commitment for U.S. Services aircraft and engines; which will

continue to be bought on an annual basis for LRIPs 12 - 14 (FY 2018 -2020) and preserves

Congressional annual discretion. The estimated savings have been validated by an F-35 JPO

cost estimate, an industry analysis study and an independent assessment conducted by RAND

Corporation. Procuring approximately 445 aircraft with this Block Buy/EOQ strategy is

estimated to save approximately $2 billion compared to the LRIP 11 annual procurement price.

Block Buy savings are achieved by allowing contractors to utilize EOQ purchases,

enabling suppliers down to the component level to maximize production economies of scale.

Savings are also achieved due to learning curve improvements on production lines and other

Government and Industry cost reduction initiatives which may not have been otherwise

executed, if not for a stable multiple year requirement to procure parts.

The risk of the Block Buy/EOQ strategy for Partner and FMS customers for Lots 12, 13

and 14 is considered low because the design of the weapon system will be stable during this

period of time. All F-35 models (A, B and C) have already completed second life (8,000 hours

full life) durability testing. Additionally, 98 percent of all hardware and subsystems

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qualifications are completed, and the full Block 3F capability will begin delivery near the end of

Lot 9, well before Lots 12, 13 and 14 are delivered. For the U.S. Services and Congress, the risk

is even lower because the only commitment is to purchase 2 years-worth of parts in a single

EOQ procurement, (FY 2019 and FY 2020).

Engine Production: In 2016, the Program completed contractual actions with Pratt &

Whitney on LRIP 9 & 10 for the F135 propulsion system. The F-35A/F-35C propulsion system

reduced 3.4 percent from the previously negotiated LRIP 8 price to the negotiated LRIP 10 price.

The F-35B propulsion system (including lift systems) reduced 6.4 percent from the previously

negotiated LRIP 8 price to the LRIP 10 price. Pratt & Whitney has delivered approximately 50

percent of the 67 production propulsion systems in LRIP 9 and is currently slightly ahead of

contract delivery requirements. Pratt & Whitney continues efforts to improve quality

surveillance within its manufacturing processes resulting in a 35 percent reduction in quality

escapes during 2016; however, improvements at the vendor level are needed to identify and

eliminate quality non-conformances which have interrupted engine deliveries. For 2017, Pratt &

Whitney remains focused on increasing capacity at existing suppliers and qualifying second and

third sources as needed to meet production ramp.

VII Sustainment

As of the beginning of February 2017, there are 216 F-35s operating at 11 sites. Luke

Air Force Base in Arizona is the main training base for the USAF, many Partners and our FMS

customers. Marine Corps Air Station (MCAS) Beaufort in South Carolina is the main F-35B

training base for the USMC and United Kingdom. Additionally, Italy will utilize MCAS

Beaufort when it receives its F-35Bs from the Italian FACO. Eglin Air Force Base in Florida is

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the main training base for the USNs F-35C until Naval Air Station (NAS) Lemoore in

California is stood up. All F-35 maintainers also get their initial maintenance training at Eglin

Air Force Base. In the next 4 years, we will add another 17 operating bases to the F-35

enterprise across all 3 regions of North America, the Pacific and Europe.

Aircraft availability rates remained steady in 2016 at 50 percent for the A-model, 47

percent for the B-model and 59 percent for the C-model. This continues to be a focus area for the

Program and various program initiatives are being executed to improve overall weapon system

availability. A disciplined Reliability & Maintainability (R&M) program, improved maintenance

procedures and manuals, continued improvement in the ALIS, better forecasting of spares

requirements, improved repair turnaround times from suppliers and incorporation of aircraft design

improvements are having a positive effect, but at a slower rate than desired. However, newer

aircraft are showing significantly better R&M Availability Rates when compared to older lot

aircraft. The chart below shows the combined (F-35 A, B and C-model) Aircraft Availability (Air

Vehicle Availability AVA) rates for each production lot. The F-35A LRIP 8 rate (54.8 percent)

was impacted by the F-35A Fuel Systems modifications and the PAO insulation corrections. The

LRIP 8 AVA rate would have been 67.1 percent if we did not experience the PAO insulation issue.

70% 66.2% 67.1%

58.6%
60%
50.2% 54.8%
50%
42.2%
A 40% 36.9%

V 30%
A
20%
10%
0% 27 A/C 20 A/C 32 A/C 36 A/C 35 A/C 30 A/C
LRIP 2/3 LRIP 4 LRIP 5 LRIP 6 LRIP 7 LRIP 8

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 In 2016, the Program continued its efforts toward the establishment of the Global

Sustainment posture across Europe, Asia-Pacific, and North America. Last fall, the Program

made regional Maintenance, Repair, Overhaul, and Upgrade (MRO&U) selections for repairing

65 out of 774 repairable components on the F-35. These initial component repair capabilities

when combined with F-35 airframe and engine heavy-level maintenance will provide all

customers including the U.S. Services the ability to maintain and repair their aircraft globally.

The F-35 JPO will assign the remaining 709 components over the next 2 to 3 years and in

October 2016 released a request for information for F-35 warehousing and support equipment

repairs. DoD will assign to the F-35 Partners and FMS customers repair capabilities such as

wheels and brakes, electrical and hydraulic systems, maintenance of support equipment, and

warehousing for the global supply chain. These same capabilities either currently exist or are

being developed at the U.S. Services depots in the U.S. in accordance with current U.S. law.

VIII Delivering Combat Capability

In support of meeting the USAFs IOC, the 388th Fighter Wing at Hill Air Force Base in

Utah deployed its F-35As to Mountain Home Air Force Base in Idaho for a two-week exercise last

summer. The unit successfully flew all 88 of its planned sorties and achieved 94 percent direct hits

with the weapons it expended. F-35 pilots executed multiple air-to-air and air-to-ground

engagements with threats and the F-35 proved to be extremely survivable in both environments.

The USMC took its F-35Bs to Red Flag last summer. The F-35 flew 67 of its 70

scheduled sorties and proved itself as a dominant weapon system. During the first few weeks of

that exercise, F-35s were not only NOT shot down but were not targeted. They also hit all their

targets. And by the end of the exercise, F-35s were being used as Intelligence Surveillance

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Reconnaissance platforms above the battlespace to connect with fourth-generation airplanes to

improve their survivability.

The USMC also conducted a live fire weapons exercise at Eglin Air Force Base in Florida

last summer. The main highlight of that was one of the pilots simultaneously laser-guided a GBU-

12 bomb at the same time he was engaging an air-to-air target with an AIM-120 radar missile.

Both were direct hits. This is something that no fourth-generation fighter can accomplish.

Additionally, the USMC conducted a live fire test in conjunction with the Naval

Integrated Fire Control-Counter Air family of systems last September. An F-35B from Marine

Operational Test and Evaluation Squadron 1 (VMX-1) at Edwards Air Force Base in California

participated in Live Fire Test at White Sands Missile Range in New Mexico. During this

demonstration an F-35B detected, tracked and targeted a low flying MQM-170E drone aircraft

and passed this information via the aircrafts Multi-functional Advanced Data Link (MADL) to

the Aegis combat system aboard the USS Desert Ship (LLS-1). The USS Desert Ship then fired

a Standard Missile-6 missile from over-the-horizon and shot down the drone. This

demonstrated the interoperability of the F-35 with the Navys Integrated Fire Control system and

how the F-35 can make other linked platforms in the battlespace smarter and more survivable.

To round out the year, VMX-1 also deployed aboard the USS AMERICA in conjunction

with the DT ship event in October. The Marines not only assisted in DT execution with

manpower and resources, but also executed a Lightning Carrier concept demo during the final

4 days of the at-sea period during which 12 F-35B were embarked on the ship and conducted

Suppression of Enemy Air Defenses Strike missions followed by an assault support escort

mission with 2 MV-22s, 1 UH-1 and 1 AH-1. The operation successfully represented the largest

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number of F-35s aboard a ship to date.

In January of this year, the USMC also deployed 10 F-35Bs from its Marine Fighter

Attack Squadron (VFMA) 121 from Marine Corps Air Station (MCAS) in Yuma Arizona to

MCAS Iwakuni, Japan. The F-35 Lightning II JPO applauds the Marines for this

accomplishment and will continue to support them as they deploy more aircraft to MCAS

Iwakuni later this year and ready for an operational shipboard deployment next year.

IX International Partner and FMS Participants

International participation on the program with eight Partners and three FMS customers

remains strong. Over the past ten months, aircraft deliveries to our United Kingdom, Italy, and

Norway Partners have continued, while FMS customers Israel and Japan received their first

aircraft deliveries. Two significant milestones for Italy included the delivery of its first jet

completed at the Italian Final Assembly and Check-Out (FACO) facility in Cameri, Italy and

also the first aircraft arrival into its operational base located in Amendola, Italy. Notably, Israel

also achieved first aircraft arrival into its operational base in Nevatim, Israel and it has identified

a requirement for an additional 17 aircraft from an existing fleet of 33. Also, the Japanese

aircraft FACO in Nagoya and engine FACO in Mizuho are both on track to deliver their first

respective Japanese aircraft and engine later this year.

The international pilot and maintainer training taking place at Luke Air Force Base in

Arizona continues to expand with the arrival of the first Japanese aircraft in late November,

while the training taking place between the USMC and the British Royal Air Force at MCAS

Beaufort in South Carolina, continues to pay dividends for both services.

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 This past May, the two Dutch aircraft that are part of the DT fleet at Edwards Air Force

Base in California completed their first deployment to the Netherlands, where they conducted

aerial and ground environmental noise surveys, performed flights over the North Sea range, and

also appeared at the Netherlands' Open Days, the largest air show held annually in the

Netherlands. Following their three-week deployment, the jets returned to the U.S., and the

resulting noise surveys showed there were no noticeable differences between the F-35 and F-16

to the Dutch communities surrounding their airbases.

In early June, the Danish Parliament approved its governments recommendation to

acquire 27 F-35As, and Denmark became the 7th partner nation and 11th nation overall to buy

the F-35. Also that same month, F-35Bs landed for the first time in the United Kingdom. The

United Kingdom F-35B was the first to touch down and was followed shortly afterwards by two

other F-35Bs from the USMC and two USAF F-35As. The F-35s were in the United Kingdom

to support the Royal International Air Tattoo and the Farnborough Air Show taking place in

early July. More importantly, this was a deployment for the United Kingdom, USMC and USAF

where they sustained and maintained the aircraft, generated sorties, and ultimately provided

lessons learned on future F-35 operations.

In September, Turkey held the 65 percent Design Review for its first Main Operating

Base which will be located in Malatya, Turkey. This review is a major milestone on the way to

ensuring Turkeys infrastructure is ready for aircraft arrival in 2019. In late October, the Turkey

Defense Industrial Executive Committee met and approved the Block Buy for 24 aircraft over 3

contract years.

26
 Following flight testing and the USAF's recommendation, Australia authorized aerial

refueling operations between its KC-30A tanker aircraft and F-35As in January. Preparations at

Australia's first operating base, Royal Australian Air Force Base in Williamtown continue as

construction of hangers, training centers, and information support centers remain on schedule.

And, finally, the debut of Australias F-35As at the 2017 Avalon International Airshow is on

track and scheduled for March 2017 near Melbourne.

November was a significant month for South Korea as it was one of the countries

assigned initial F-35 component repair capability. In addition, the first six Korean aircraft were

awarded as part of the recent Lot 10 aircraft contract, with expected delivery in 2018.

Over the past year, the JPO has worked closely with the U.S. Defense Security

Cooperation Agency to promptly and thoroughly answer all questions provided by the Canadian

government in support of its fighter replacement analysis. Further, the JPO has continued to

work with potential FMS customers, including Belgium, Finland, and Spain, responding to all

requests for information and other official inquiries.

X Conclusion

In summary, the F-35 fleet is rapidly expanding and F-35s are now flying in the U.S.,

Japan, Italy and Israel. The F-35 Program is nearing the completion of development within the

cost and schedule boundaries laid in during the 2011 Rebaseline. The Program is also continuing

to ramp up production and building the global sustainment enterprise. The Programs main

focus areas include:

Completing development within the time and resources we have;

Delivering the full Block 3F capabilities;
Smoothly transitioning from development to Follow-on-Modernization;

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 Completing the production ramp-up while continuing to improve quality and the delivery
schedule;
Continuing to grow the global sustainment enterprise, and;
Improving the fielded fleets performance

As always, our number one overarching priority is to continue to drive cost out of all aspects of

the F-35 Program, making it more affordable for all our customers.

As development continues we expect new technical discoveries will occur; however, as

we have demonstrated in the past, we believe the combined Government/Industry team has the

ability to resolve any future issues. My JPO teams commitment to overcoming these and any

future challenges is unwavering and we will deliver the F-35s full capability to our customers.

We will continue executing with integrity, discipline, transparency and accountability, holding

ourselves accountable for the outcomes on this Program. Our team recognizes the great

responsibility we have been given to provide the foundation of future U.S. and Allied fighter

capability for decades to come. We also recognize that someday your sons and daughters, or

grandsons and granddaughters may take this aircraft into harms way to defend our freedom and

way of life. It is a responsibility we never forget.

Thank you again for this opportunity to discuss the F-35 Program. We look forward to

answering any questions you have.

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